Teaming with Providers: Together, Everyone Achieves More
When a team works well together, the members collectively accomplish more than any of the individuals could have accomplished alone. Certainly, we have proven that adage true in healthcare, as can be seen with the success of integrated delivery systems, Independent Practice Associations (IPAs), and Accountable Care Organizations (ACOs).
As health plans continue adapting to the growing influence of clinical quality on its provider network operations, building an effective team with your providers has never been more important.
But, factor in the necessities of compensating members of the team for their role, of each team meeting its profit targets and the competing priorities faced by often short-staffed teams, it should come as no surprise many health plan staff and providers are left wondering how to make it happen. Below are our top five ways to engage your providers to influence your Star Ratings.
- Prioritization: Ensure Clinical, Risk Adjustment, Stars, Claims, and Network Operations are all collaborating and prioritizing their "asks" of the providers and working together to ensure the needs of the providers are met.
- Education, Education, Education: By arming your leaders with the education necessary to purchase the best reporting tools, they are able to develop the goals and framework necessary for the frontline staff to educate and respond to providers.
- Support ICD-10 readiness: If CMS predictions hold true, denial rates and outstanding receivables are likely to increase during the conversion. Despite testing and readiness efforts, it's entirely possible some providers may not be staffed or prepared to mitigate technology-related problems among its payers or to weather the longer-term reduced productivity of their coding staff. Before your providers can invest additional energy into our Quality priorities, they've got to keep the cash flowing.
- Focus on actionability: Health plans often provide catalogs of reports each month showing providers' numerous views of their panels and forget providers are taught evidence-based medicine and how to care for patients, not administrative functions. By telling providers to improve care, we can make them vulnerable and defensive. By collaborating to improve processes and coordination for better patient satisfaction and outcomes, we can let the providers be providers.
- Continuous measurement, re-evaluation, and reward: While we naturally monitor our outcomes and re-evaluate our processes, we sometimes forget to reward ourselves for a job well done. We can build in contractual provider incentives, but peer recognition and a "thank you" are often simple but overlooked motivators.
Questions to ask:
- Were there any surprises in your first Star Ratings Plan Preview rates?
- Are your providers effectively supporting your Star Ratings goals?
From identifying the health plan functions that require provider engagement, to interpreting Plan Preview rates and trends in order to build 4th quarter Star Ratings action plans and evaluating provider contracting strategies around a holistic approach, our team can help. Contact me directly at emartin@ghgadvisors.com .
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CMS recently notified plans of the first preview period for the 2016 initial Star Ratings data. It is critical for plans to begin evaluating their Star Ratings now to pinpoint problem areas, implement tactical actions, and identify improvement opportunities to raise their current score. Need assistance with your action plan or preparing for plan year 2016? Contact us today >>
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Medicare at 50: Past, Present & Future
Since its inception on July 30,1965, millions of elderly and disabled Americans have been able to obtain medical care through Medicare. Before Medicare, almost half of all Americans 65 and older had no health insurance. Today that number has dropped to a staggering 2 percent.
The accomplishments for Medicare have been noteworthy.
These include increased access to health insurance coverage and healthcare, decreased disparities in access by race leading to desegregation of hospital staff and facilities, as well as payment and delivery system reforms such as prospective payment, capitation, and shared savings — all of which have been adopted by private payers. Karen Davis from Johns Hopkins and former President of the Commonwealth Fund noted the success of Medicare's insurance Marketplace which offers beneficiaries a choice of traditional Medicare and Medicare Advantage plans with a 4-5 Star program that is driving plans and enrollment to higher quality. Medicare spending per capita has grown more slowly than overall health spending per capita and is currently at historically low rates.
The challenges are many.
Disjointed coverage (Parts A, B, D) is confusing to beneficiaries and results in high administrative costs and overpayments. Out-of-pocket costs for premiums, cost-sharing, and uncovered services remain high, and Medicare has no out-of-pocket maximum. Medicare does not cover long-term care services or home- and community-based services. Provider payment still remains largely fee-for-service, resulting in incentives for volume and provider not patient-centered care.
The Future
The future involves many different directions. The first is moving from an acute care model to a program that can effectively care for beneficiaries with complex chronic conditions. Provider payment reform needs to move to value-based payment that rewards efficiency and quality. The focus needs to shift to patient-centered care rather than provider-centric care. Care coordination and team care needs to be a focus. Program fragmentation and high out-of-pocket costs, particularly for high service users, needs to be addressed.
As Charles Darwin pointed out, evolution isn't about being the biggest or the smartest, but the most adaptable. Government programs have become the biggest opportunity for payers. Rates will be positive especially in Medicare Advantage, but the compliance environment will be brutal throughout the rest of the Obama administration. Star Ratings and the member experience are now driving the market — 30 plus states are now using some form of Star Ratings for performance-based payment, many states have adopted quality ratings for Medicaid managed care plans, but there is no national standard….yet, and the Health Insurance Marketplace will begin publishing quality ratings in 2016.
What have we learned?
John Gorman, Founder and Executive Chairman at Gorman Health Group, recently provided lessons learned in the 19 years we have partnered with health plans operating in Medicare, Medicaid and now the Health Insurance Marketplaces. He discusses the current industry environment and what's important moving forward. Read more >>
About 81M will be enrolled in Medicare by 2030. Is your organization prepared?
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Gorman Health Group evaluates the design and delivery of high quality collaborative care while achieving compliance and improving revenue cycle management. Our multidisciplinary team of experts will assess the alignment of your products, your current network and your market to translate your business strategies into practical, efficient and rigorous work processes with the highest degree of compliance and accountability. Visit our website to learn more >>
GHG can evaluate your Star Ratings approach, and identify tactics you can begin implementing immediately, to integrate initiatives, eliminate redundancies, and build an enterprise-wide Star management structure. We can help you identify clinical, operational, and networking opportunities to increase your score for 2016 and beyond. Contact us to learn more >>
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EHR Incentive Programs: Improving Access to Care
The 2014 Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs were developed to provide financial incentives to eligible professionals, eligible hospitals, and Critical Access Hospitals (CAHs) to achieve meaningful use of certified EHR technology with the goal of improving patient care. The programs worked to prompt healthcare providers to adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology. In her May 18, 2015, article in RevCycleIntelligence, Jacqueline DiChiara reported by the end of 2014, EHR incentive payments reached over $28 billion with eligible hospitals receiving more than $17 billion, Medicare and Medicaid-eligible professionals collectively receiving nearly $10 billion. However, there are some changes with the EHR Technology Incentive Program that may affect your revenue—and not in a good way.
In the amended American Recovery and Reinvestment Act of 2009 (ARRA), Congress included provisions in the Medicare and Medicaid EHR Technology Incentive Program for CAHs, as well as eligible professionals and hospitals, who did not successfully demonstrate meaningful use of Certified EHR Technology to experience a negative payment adjustment to their reimbursement. Effective January 1, 2016, payment adjustments will be applied for those Medicare-eligible professionals not meeting the criteria for meaningful use in the Medicare EHR Incentive Program. For eligible hospitals, payment adjustments were applied as of October 1, 2014. Interestingly, DiChiara notes over 28,000 eligible professionals reported a 2% decrease in their 2015 Medicare payments for not meeting the standards related to Electronic Prescribing (eRx) and the Medicare EHR Incentive Program. CAHs unable to demonstrate meaningful use for the applicable reporting period of fiscal year (FY) 2015 will have a decrease in their reimbursement, from 101% of its reasonable costs to 100.66%, according to CMS.gov. For 2016, the percent of reasonable costs reimbursement decreases to 100.33% and then down again to 100% for 2017 and for each year thereafter, well into years 2020 and beyond.
CAHs were created to preserve access to primary and emergency care services in isolated rural areas by improving the financial conditions of CAHs and, subsequently, preventing some closures. Choices Magazine article, "Performance of the Critical Access Hospital Program: Lessons Learned for Future Rural Hospital Effectiveness in a Changing Health Policy Landscape," highlighted the CAH program grew rapidly from 41 hospitals in 1999 to 1,055 hospitals in 2005 and to 1,327 CAHs in 2011 because of the 1983 Medicare switch from cost-based reimbursement to the Prospective Payment System (PPS). CAHs now face possible Medicare cuts. Hopefully, the following information from CMS.gov can help CAHs effectively avoid EHR Incentive Program payment adjustments and ensure their financial longevity as Medicare and Medicaid providers.
- Hardship: A CAH may, on a case-by-case basis, be exempted from this adjustment if the CAH can demonstrate, on an annual basis, becoming a meaningful user of EHR technology would result in a significant hardship. However, in no case will a CAH be granted an exemption for more than five years.
- July 1, 2015: 2016 Eligible Professional (EP) Medicare EHR Incentive Program Hardship Exception Application Deadline
- CAHs can apply for hardship exceptions in the following categories:
- Infrastructure — CAHs must demonstrate they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure (e.g., lack of broadband).
- New CAHs — CAHs with new Centers for Medicare & Medicaid Services (CMS) Certification Numbers (CCNs) not having had time to become meaningful users can apply for a limited exception to payment adjustments. The hardship exception is limited to one full year after the CAH accepts its first patient.
- Unforeseen Circumstances — Examples may include a natural disaster or other unforeseeable barrier.
- Meaningful Use: In order to avoid the payment adjustments, CAHs must demonstrate meaningful use within the full federal fiscal year that is the same as the payment adjustment year. The adjustment would then apply based upon the cost reporting period beginning in the payment adjustment year (that is, FY 2015 and thereafter). Thus, if a CAH is not a meaningful user for FY 2015 and thereafter, the adjustment would then be applied to the CAH's reasonable costs incurred in a cost reporting period beginning in that affected fiscal year.
- An eligible hospital or CAH demonstrates meaningful use by successfully attesting through either the CMS Medicare EHR Incentive Programs Attestation System (https://ehrincentives.cms.gov/) or through its state's attestation system.
- CAHs are required to submit their attestations for meaningful use by November 30th of the following fiscal year. For example, if a CAH is attesting it was a meaningful EHR user for FY 2015, the attestation must be submitted no later than November 30, 2015, in order to avoid payment adjustments.
- Eligible hospitals and CAHs participating in meaningful use for the first time this year may attest to a 90-day reporting period for FY 2015. CMS is allowing eligible hospitals and CAHs participating in meaningful use for the first time the ability to attest. The hospitals must first register in the CMS Registration and Attestation System at: https://ehrincentives.cms.gov/hitech/login.action. Once the registration is active, the hospital should contact Elizabeth Holland at elizabeth.holland@cms.hhs.gov and provide the hospital name, CCN, and contact person information.
- Call CMS Information Center: Ask questions, get more information. Dial 888-734-6433 then dial 1 for the EHR Information Center.
CMS to Monitor Access to Care, Defines Provider Network Adequacy Pilot Program
During the Centers for Medicare & Medicaid Services (CMS) Audit & Enforcement Conference & Webinar held on June 16, 2015, CMS provided a glimpse as to how the Provider Network Adequacy (PNA) Pilot Program would begin to monitor beneficiary access to care.
The two-pronged approach will evaluate both provider network adequacy and the plan's provider directory. As we have seen over the past several months, from the Call Letter to the proposed Medicaid rule, there is a renewed focus on provider network access across all government-sponsored health plans. The focus is on not only the beneficiary's ability to access care in a timely manner but to ensure the member and referring providers have up-to-date demographic information on providers, including open/closed panel status.
Historically speaking, Medicare Advantage (MA) plans have submitted their provider and facility networks via Health Service Delivery (HSD) tables during their initial application or during a service area expansion (SAE). The HSD tables have been the source of truth for the MA plan to validate 90% of their enrollees had access to the full spectrum of providers and facilities within a given time and distance metric. Unless requested during the bid submission process, plans may not have validated their network against CMS standards from the original date of inception. We have found from year to year, even with no changes to the provider network, it is possible for adequacy to change due to the beneficiary population files updated by CMS. Additionally, we may have kept the same providers in the network but may not have captured changes, such as closing their panel to new patients, in our directories. Fueled by increasing beneficiary complaints, plans will now be required to diligently monitor their providers and the provider office information.
As a result, CMS is supplementing the current guidance on provider directories and network access and availability reporting. CMS expects plans to establish and maintain a proactive, structured process to assess the availability of contracted providers on a monthly basis and monitor more closely member access to their provider network. CMS will monitor compliance via direct monitoring and the new PNA Pilot Program.
The new PNA Pilot Program will evaluate the two functional areas, network adequacy and provider directory, by requiring submission of HSD tables and by CMS calling a sub-set of providers from the HSD tables to monitor accuracy of information. The process, while still under development by CMS, is designed to promote continual self-evaluation by health plans. During the Audit & Enforcement Conference & Webcast, CMS outlined the process for the PNA requests.
- CMS will issue a Pre-Audit Issue Summary (PAIS)
- Plans will have the ability to disclose network adequacy issues in two ways: sponsor-disclosed, meaning the issue was discovered by the plan and disclosed to CMS prior to the audit, or self-identified, meaning the issue was discovered by the plan after the start of the audit and self-reported to CMS.
- In response to the network adequacy findings, plans will be asked to provide a Beneficiary Impact Analysis to disclose areas where beneficiaries will be affected by network issues. The impact analysis should be a three-month look-back at all beneficiaries who received care by the identified provider(s).
- Plan will also be asked to provide their provider directory to CMS.
A Sample PNA Audit Timeline:
- Within 5 business days of the engagement letter:
- PAIS will be issued
- Impact Analysis for PAIS
- Provider Directory
- Within 10 business days of the engagement letter:
- HSD tables uploaded to Network Management Module (NMM)
- NMM will provide plan with a report identifying all network deficiencies
- Within 14 days of receipt of the deficiency notice:
- Submit exception requests
The aggressive audit timeline will require plans to incorporate a robust network adequacy monitoring policy into its workflow processes. When we look at the types of exception requests that will potentially be included in the final CMS policy, plans will not only need to be well-versed on their network but also the total number of providers/facilities available in their service area. Plans must be able to identify patterns of care for their network and non-network providers, alternative providers that could provide the services, such as ENTs providing allergy clinics, and be able to pull the information together in a relatively short time.
The second portion of the audit process will be to ensure the provider directory is current for provider demographic information and open/closed panel status. Per CMS, they will review a select representative sample of providers from the HSD tables and verify the directory information, by calling each provider office, to ensure the information available to the beneficiary is correct. The Call Letter indicated plans should incorporate a robust policy to outreach to providers on a monthly basis to validate the provider's network status and ensure any changes, both provider or plan initiated, are updated on a real-time basis. CMS intends to further define the new policies and procedures governing the PNA Pilot Program and issue the guidance late summer/early fall via the Health Plan Management System (HPMS).
As CMS increases the scrutiny on provider network access and availability, we can only wait to see the impact it will have on a plan's ability to move towards building a network based upon quality indicators and the value-based contracting and reimbursement models needed to shift providers into a population health and outcomes-oriented mindset.
Gorman Health Group can assist your organization navigate the network adequacy pilot and provide the infrastructure support solutions needed to build a smarter provider network. Contact me directly at emartin@ghgadvisors.com for more information.
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Takeaways from Accountable Physician Groups' Annual Summit
Twice a year I get the honor of speaking to the California Association of Physician Groups' (CAPG) annual summit and DC policy meeting. CAPG represents accountable, capitated physician groups, and now has members in 39 states. They're always among my favorite speeches given how sophisticated the audiences are. Here's a few takeaways from my talk last week on "The Future of Government Programs":
- Forevermore, physician group revenues and earnings will be dominated by Medicare Advantage, Medicaid and dual eligible health plans, and the ObamaCare plans, most likely in that order.
- Everything that Medicare Advantage (MA) does, the Medicaid, ObamaCare, and commercial markets follow 3-5 years later. Nobody knows this better than the CAPG members from CA, which the rest of the nation lags. Want to still be attending CAPG meetings in 2020? Master Star Ratings and risk adjustment. They'll apply to all lines of business if they don't already, and they are the keys to survival already in MA.
- Value-based contracting is in its infancy but will soon define all health plan contracts with physician groups. Fee-for-service is dead. Performance-based capitation is the only future. To master it a physician group needs a range of capabilities, including eligibility verification, interoperability, actionable clinical intelligence in real time, standardized care processes, and chronic care management, across all business lines.
- Most Accountable Care Organizations (ACOs), especially the 424 in Medicare, will not see a return on their investment. They will have spent millions to participate in these experiments and around 80% won't see a payoff. 2016 and 2017, when Medicare Advantage benchmark rates turn into a tailwind, present the perfect opportunity for ACOs to "move up the food chain" to become health plans.
- Dual eligibles are the biggest opportunity of our lifetimes, and there is no question that Special Needs Plans designed to serve them can be profitable. SNPs are a principal mechanism for states to shift long-term care risk into the private sector, and will be a central product for ACOs converting into Medicare Advantage. But they require a range of capabilities most physician groups lack today, such as enabling and social services that duals must have from their insurer.
- In all government programs, the "5/60 Rule" governs. 5% of members often account for 60% of costs. Any physician group that aspires to bear risk must be able to identify and intervene with their 5 percenters or they won't be risk-bearing for long.
- The biggest vulnerabilities for MA plans are consumer protections like appeals and grievances and complaint management, and who they have selected as their pharmacy benefit manager (PBM). Most PBMs are frankly terrible at Medicare Part D administration, and Star Ratings now count far more in Part D than in Medicare Advantage to a health plan's overall score. Physician groups typically have little or no experience with either PBMs or consumer protections.
- Retail pharmacies and the home are the most underutilized sources of care to government programs beneficiaries. Any successful physician group evolution will involve better integration of both sites for the chronically ill.
- Most at-risk physician groups are directly involved in coding and reporting for risk adjustment. Federal agencies are paying unprecedented attention to upcoding in Medicare Advantage with an eye to hundreds of millions of dollars in clawbacks and recoveries. The emphasis at physician groups involved in risk adjustment must move from chart reviews and claims extracts to more holistic member evaluations, and from a culture of "what can we get?" to "how do we stay out of trouble?"
Evolution is a messy business. Nowhere is that more the case than in physician groups evolving from fee-for-service to value-based contracting and becoming insurance companies. If it was an easy business, we'd be out of business.
Resources
Don't miss Gorman Health Group's Chief Consulting Officer, with colleagues Jane Scott, Senior Vice President of Clinical Innovations and Regan Pennypacker, Vice President of Compliance Solutions, as they discuss your member experience and the factors that influence success and failure, as well as prominent compliance and service issues plaguing the industry. Register now >>
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Let's get started. Contact us today.
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CVS Health is Serious About Growing its Clinic Business
CVS Health is serious about growing its clinic business. On Monday, USA TODAY reported that CVS Health plans to acquire Target's pharmacy and clinic business for $1.9 billion.
Healthcare reform is producing a surge in newly insured people seeking care, and hospitals are under severe pressure to keep pace.
"This long-term strategic relationship will certainly benefit the patients, the employees and the shareholders of both companies," CVS Health CEO Larry Merlo said in a conference call.
In addition, a primary care provider shortage is predicted to limit access to care. This is where CVS Health's new acquisition will come into play with more than 1,660 Target pharmacies offering accessible care in 47 states.
Demographic change exacerbates the challenge, with a steep rise in the ratio of elderly to young, adding yet more demand. Retail health clinics may be the "release valve" to the strained healthcare system and the future of care.
CVS Health has been the leader in the retail clinic industry to date, but other retailers like Walmart and Walgreens are poised for growth. The move to acquire Target's pharmacy and clinic business allows CVS Health to solidify its lead in the clinic business.
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Gorman Health Group continues to provide strategic, operational, financial, and clinical services to the healthcare industry, across a full spectrum of business needs. Our software solutions place efficient and compliant operations within reach. Learn more: https://www.ghgadvisors.com/about/.
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CMS Spotlight on Provider Directories & Network Adequacy
As we learned from the 2016 Call Letter, the Centers for Medicare & Medicaid Services (CMS) is placing a renewed focus on Medicare Advantage (MA) plans' provider network, with emphasis on both online provider directories and network adequacy.
CMS plans to monitor compliance of plans' adherence through direct monitoring with additional contract funds and through the development of a new network adequacy audit protocol to be tested in 2015 that will determine whether the provider network meets published CMS adequacy standards. The compliance and enforcement of the new protocols will include civil money penalties (CMPs) and enrollment closures.
Recent beneficiary complaints have brought into focus the accuracy, or lack thereof, with Medicare Advantage Organizations' (MAOs') online provider directories. Beneficiaries, and sometimes referring providers, have shown frustration in attempting to make an appointment, only to find the provider is no longer accepting new patients, has moved, or is no longer participating with the plan. CMS has supplemented their current guidance on provider directories and expects plans to:
- Establish and maintain a proactive and structured process by which to verify the availability of its contracted providers. This process will include outreach, on a monthly basis, to verify there has been no change in a provider's address, phone number, and office hours, and determine if the provider's panel is open or closed to new patients,
- Establish a policy to review and address beneficiary complaints when they are denied access to a provider(s), and
- Include a provision for real-time updates to the online directory.
Additionally, the Call Letter announced a new network adequacy protocol to be tested in 2015. During his presentation at the CMS Medicare Advantage Prescription Drug Plan (MA-PD) Spring Conference & Webcast, Greg Buglio provided insight concerning the upcoming audit protocol.
Mr. Buglio shared that the Network Management Module (NMM) is a standalone module, a version of which currently resides within the Health Plan Management System (HPMS), which may be utilized by MA plans to submit Health Services Delivery (HSD) provider and facility tables for evaluation against CMS HSD criteria.
CMS notes a robust version of the NMM will be released at the end of July 2015. According to CMS, the new version will be highly flexible and support a variety of reasons for HSD submission. The updated NMM will support CMS-initiated requests for submission of HSD tables and exception requests for various processes. Once released in late summer/early fall, the NMM will contain user guides, help screens, and templates for HSD submission.
The NMM will also permit plan-initiated submissions. It was noted plan-initiated submissions will not be viewable or evaluated by CMS. The goal is that plans will be encouraged to continuously self-evaluate their own network adequacy against CMS' criteria. Presently, CMS only reviews network adequacy with initial and service area expansion applications. We anticipate the self-evaluation will work similar to the network pre-checks available during the application process. It was noted the templates within the NMM would not be the same template used during the application process. The two templates will not be interchangeable.
We anticipate further guidance surrounding the network adequacy protocol to be presented during CMS' upcoming MA-PD Audit & Enforcement Conference & Webcast taking place on June 16. Prioritize this event, and attend either in person or via webinar.
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Medical Loss Ratio Concern in CMS Proposed Medicaid Rule
The much anticipated Medicaid regulation from the Centers for Medicare & Medicaid Services (CMS) has been released, which aims at helping align regulations for managed care plans, creating a dynamic shift in how the Medicaid business will be handled moving forward.
One example of the new change is the proposed implementation of the 85% minimum Medical Loss Ratio (MLR) for the Medicaid program. This is to ensure adequate funds are being spent on coverage for Medicaid members appropriately. MLR thresholds are currently being used by the private health insurance plans, as well as, Medicare Advantage plans for projections of future medical costs and covered services. This could pose a problem for Medicaid Managed Care Organizations (MCOs). While Medicaid MCOs don't have the high sales and marketing costs of individual commercial plans, since sales are handled by the states, compliance costs could be high, making the 85% figure a cause for concern. "Medicaid MCOs will have to be diligent in identifying and documenting costs incurred to improve quality, to drive up their MLRs, said my colleague, Bill MacBain, Senior Vice President of Strategy.
With the soaring number of newly enrolled members joining Medicaid, Avalere estimated that by the end of this year, 73% of Medicaid members will be receiving some type of service through a managed care plan. The regulation aims to look at delivering a structured approach to supporting delivery systems, enhancing health outcomes and most importantly, improving the beneficiary experiences. These new regulations seeks to align CMS' Medicaid regulations to reflect today's changes in delivery systems, increase measures in managing care coordination, and promote quality of care using analytic data to oversee Medicaid managed care.
Additional proposed changes include:
1. Appeals and Grievances — The proposed rule makes a few updates to the appeals and grievances process to align to MA plans. For example, the rule seeks to shorten the time frame that Managed Care Organizations (MCOs) and Prepaid Inpatient Health Plan (PIHPs) have to make a decision about a standard appeal from 45 days to 30 days, same as MA plans. The expedited appeal time frame would be shortened from three days to 72 hours, also same as MA.
2. Beneficiary Protections — Under current regulations, coordination and continuity of care focus on primary and acute medical care. The proposed rules aim to reduce coordination issues beneficiaries with chronic and complex conditions face. The proposed rule also seeks to align enrollment practices between Medicaid fee-for-service (FFS), Medicaid managed care, and Marketplace coverage.
3. Network Adequacy Requirement - The rule would impose new standards to ensure beneficiaries have adequate provider networks and ensure beneficiaries are receiving accurate network information.
4. Medicaid Managed Care Quality Rating System (QRS) — Align with existing MA and Marketplace rating systems. Standardize quality metrics among states and plans.
5. Long-term Care - As expected, the rule also includes a section on managed Medicaid long-term care. The proposed rule could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
The proposed rule will be posted in the Federal Register on June 1. The deadline to submit comments is July 27.
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Gorman Health Group is dedicated to assisting Medicaid managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with your Medicaid needs >>
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The Imminent Medicaid Mega-Reg is Gonna be "Epic"
For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We're coming to call it the "mega-reg" here. Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting the term "epic" used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.
Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn't address long term care services and supports and managed long-term care, a major impetus for program reform at the state level. The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.
MACPAC's debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:
- Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard. CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard. The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
- Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit. Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers. The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
- Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services. CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
- Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance. CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
- Transparency — Medicaid health plans want transparency of state practices to develop capitation rates. CMS could require states to share data and assumptions and allow plans to comment during federal review.
- Baseline/Encounter Data — CMS could impose additional standards in addition to "appropriate data." CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
- New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.
Beyond payment issues in the mega-reg, the Commissioners discussed:
- Long Term Care -- CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
- Provider Networks -- the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans. Strengthened requirements for appeals and grievances may also be included. The proposed rule may also include enhanced quality data and reporting. It's expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.
We'll have scads of analysis of the Medicaid proposed rule as soon as it hits the street. It's gonna be huge.
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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>
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You're Doing it Wrong in Care Management
An important paper recently released in the American Journal of Managed Care shattered the notion that care management can save money on high utilizers. The article reviewed recent studies of the effectiveness of health plan care management programs and found that, while many studies show significant savings, more rigorous studies concluded that savings were "limited or nonexistent." Mind. Blown.
We're all familiar with the "80/20 rule" of the commercial health insurance market: 20% of members account for 80% of expenditures. In government programs, Medicaid, Medicare, and now ObamaCare, it's the "5/60" rule: 5% of members account for 60% of spending. The AJMC article showed that across all payers in 2012, it's "5/50". 95% of the population accounted for just half of health spending, while the other half of spending was towards care for 5% of the population. The 5% of people needing to spend the most on health care spend an average of around $43,000 annually; people in the top 1% have average spending of almost $98,000. At the other end of the spectrum, the 50% of the population with the lowest spending accounted for less than 3% of all total health spending; the average spending for this group was $234.
The article then explored multiple studies on effectiveness of care management, concluding it's mostly pointless. It gave several reasons for why this might occur:
- Many high-utilizers only stay in this category for a short period of time. Conditions causing them to need intensive care may resolve quickly, reducing costs, but a study lacking a control group may inappropriately attribute this savings to the care management program.
- High utilizers suffer from a wide range of conditions and require a wide range of interventions, making it difficult for care management programs to tailor teams meeting each patient's needs.
- Providers working with a care management team may better identify conditions that were previously going untreated, leading to better outcomes, but also higher costs for additional services and therapies.
The author concluded that "for care management programs focusing on high-utilizing patients, it is crucial to select patients with long-term utilization patterns that are driven by the factors most conducive to change. Given the very limited direct evidence suggesting how to accomplish this, care management programs are best served by being kept small and focused on the highest-need patients, who may not necessarily be current high utilizers."
This finding calls for a rethinking across our industry about care management. For one thing, most health plans in our 19 years' experience are still doing 1990s-style managed care: preauthorizations, referrals, concurrent review -- what we refer to as "make work" medical management. It's look busy, high head-count work that does little to improve quality or reduce unnecessary spending.
Many GHG clients have been working with us to modernize this approach into data-driven care coordination "pods" providing a holistic model of care focused on high utilizers and those about to become them. This study means we need to recommit to data analytics identifying and directing the work of care managers toward those beneficiaries with long-term needs that can be impacted. This means greater emphasis on preventable episodes of care, and on end-of-life care preferences, advance directives and care plans. If you take the top 5% of the membership that is incurring the most cost and provide complex care management, including a higher level of home care, hospital diversion, medication therapy management, nutrition counseling, and wound care, plans and their provider organizations will see a reduction in avoidable medical expenses.
Savings can also be realized if that membership is appropriately placed in the right plan with the right network. Care Management might not be the answer but applicable coverage is a strategy. That's where plan and benefit design is so important. Innovative plans are working with specialists to design products that reflect risk and chronic conditions of their members. Our work with a prominent dialysis and kidney care provider is a perfect example: design a benefit and align a network that is tailored to patients with varying levels of chronic kidney disease, preventing disease progression and/or avoidable costs traditionally seen if CKD is not managed along the disease state continuum. Progressive conditions like CKD, Alzheimer's, and many cancers lend themselves well to "smart management" that spans clinical staff and benefit design alike.
The one thing you know about government beneficiaries is that if they're not sick today, they're gonna be. The game has always been finding the ones who need extraordinary care before they need it, and ensuring they get it in the right place, at the right time, from the right provider. That hasn't changed. This study underscores the point. "Make work" care management must give way to "make it work".
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